Let’s admit, you’ve got some not-so-good money habits that may pass on to your children. These could be in the form of late debt payments or some last minute budgeting hacks to pay off your balances in full.
Having these behavioral shortcomings is not at all unique to you. Rather, everyone has one or the other flaws as far as their personal financial management is concerned. So, where do children figure in here?
Parents as a financial coach to their kids
Right from the age when your kids are a toddler, it’s likely for them to keep a close watch on the household’s daily issues, especially if it's money.
- Children have been found to understand and follow household financial issues from a tender age of 8 to a ripe old age of 17. According to Communication Research Reports, a study conducted by them in 2014, has revealed that . Sadly, both moms and dads keep quiet when they undergo some sort of financial trouble like debt, accident or loss of employment.
- As per Paul L. Harris, professor of psychology at Harvard University and author of “Trusting What You’re Told: How Children Learn From Others”, . However, that doesn’t imply any sense that, parents need to be perfect in order to impart some crucial life lessons like, healthy financial management skills to their children.
- He further added that parents shouldn't assume that their children learn from them automatically. This piece of advice is particularly important for those who accept that, they have made certain wrong financial choices in their lives.
Therefore, you need to take a hard look at your own money habits and pair that up with proper communication as well as transparency in money management, while embarking on the task of educating your kids about the values of good personal financial health.
To start with, you need to get your acts together and , so as .
Bad money habits to drop for your kids’ welfare
1. Excessive spending
- One of the most grievous lessons that you might be teaching your kids, whether knowingly or not, is excessive spending.
- You may use credit cards or put more importance to your desires than needs, spending more than what you make in a month. This kind of reckless spending is a surefire way to incur insurmountable debt and definitely sets a poor example for your children, to unfortunately follow.
- Now, when you’ve decided to set things straight, you need to . Moreover, be more forthcoming about any sort of mistake that you may commit and take them into confidence after having explained your position clearly.
2. Avoiding bills
2. Avoiding bills
- You may have got into debt. This is quite natural, if you happen to be an impulsive shopper. No matter how tough it’s to pay up, to a real and potentially one of the most serious financial problems in your life.
- This is your chance, to get your children to learn from real life incidents and gain first hand experience out of handling these financial challenges. That said, .
- Engage them in a thoughtful, decisive discussion about what brought you to this state of affairs and how you can handle the responsibilities without inviting any further troubles. For example, you can negotiate for a settlement, have your debts consolidated, or cut back on the unnecessary items to release some extra funds to pay back your loans.
3. Having zero savings
- This is another gruesome act of negligence that will not only ruin your life, but also of those who are directly dependent on your income - your immediate family members and your aged parents (only if they are living with you).
- Having a zero savings fund to your name in case of your untimely death.
- On the other hand, you could run deep into debts, if you’re made to pay for a certain medical emergency. Imparting the lesson of saving money for your kids will be crucial in a life without breaking the bank.
In that case, what you could do, is set up a savings account to pull at least $50 from your paycheck every month and contribute that towards it. Your kids will be grateful to you long after you’re gone, for having taught them the importance of saving money for the rainy days.